Federal Reserve Chairman Janet Yellen, referencing the Congressional Budget Office's long-term budget projections, told the Joint Economic Committee of Congress today that under current policies the federal government’s deficits “will rise to unsustainable levels.”
"[B]ernanke told the National Bureau of Economic Research that because unemployment remains high and inflation is below the Fed’s target, the policies are still necessary. He also said the economy is being held back by higher taxes and federal spending cuts.
“If you put all of that together, you can only conclude that highly accommodative monetary policy for the foreseeable future is what is needed for the U.S. economy,” Bernanke said
"The Fed needs to drive down borrowing rates because the economy isn't growing fast enough to reduce high unemployment, Bernanke said in a speech to the Economic Club of Indiana. The unemployment rate is 8.1 percent.
Low rates could also help shrink the federal budget deficit by easing the government's borrowing costs and generating tax revenue from stronger growth, Bernanke argued.